DiSanto Supports Fiscally Responsible, No Tax Increase State Budget

HARRISBURG—Senator John DiSanto (Dauphin/Perry) announced today the Senate approved a $40.8 billion General Fund Budget for Fiscal Year 2021-22 that continues to support Pennsylvania’s economic recovery from the COVID-19 pandemic and protects taxpayers in coming years.

Senate Bill 255 now goes to the governor’s desk for enactment into law.

The fiscally responsible budget does not include any of the tax increases proposed by the governor in February, which included a 46% Personal Income Tax hike and the imposition of an energy tax. In addition, the final budget restores the governor’s cuts in funding for valued health care and agricultural programs and services.

While Pennsylvania is on pace to end the current fiscal year with $2.5 billion in surplus revenue, Senate Republicans cautioned that the revenue projections for the current fiscal year were made as Pennsylvania was coping with the financial devastation caused by the global pandemic and the governor’s business closure orders.

Despite a significant rebound in revenues and the availability of federal stimulus funds to help balance the budget, lawmakers must remain vigilant and pragmatic because Pennsylvania’s mandated spending growth still outpaces its revenue growth, and the Commonwealth cannot depend on continued federal funding.

The budget takes into consideration next year’s expected revenues and expenditures with a goal of avoiding future tax increases:

  • All $2.5 billion in surplus FY 2020-21 funds will be allocated to the Rainy Day Fund, augmenting the current $240 million balance in that account.
  • $2.5 billion in projected surplus revenue from FY 2021-22 will be used to balance the next year’s budget.
  • $2.6 billion of remaining federal funding will also be used to help balance the next year’s budget.

To ensure our students have access to a quality education, this budget includes an additional $300 million for Basic Education Funding, $50 million for Special Education, $25 million for Pre-K programs, $5 million for Head Start and $40 million for educational tax credit scholarship programs.

The budget allocates $279 million in federal funding to support highway and bridge improvement projects. This will enable the Commonwealth to address its deteriorating transportation network while supporting employers and creating family sustaining jobs.

A total of $282 million in federal money is directed to supporting Pennsylvania’s nursing homes ($247 million) and assisted care facilities and personal care homes ($30 million), many of which were severely impacted by the COVID-19 pandemic. In addition, $5 million will provide for ventilation improvements.

“This budget makes record investments in our schools, provides for essential government services and forgoes the Governor’s proposed tax hikes on hardworking Pennsylvanians as our economy recovers from the pandemic,” DiSanto said. “Rather than spend all this year’s surplus and federal stimulus funds as the Democrats have been advocating, this budget prudently anticipates tomorrow’s challenges and assures the Commonwealth is in a solid financial position to address next year’s projected budget deficit. We must be good stewards of our taxpayer dollars and address Harrisburg’s structural overspending problem.”

CONTACT: Chuck Erdman cerdman@pasen.gov (717) 787-6801